Prospect
Print edition cover story: July 2005
On-line at: http://www.prospectmagazine.co.uk/landing_page.php
Issue 112 / July 2005
Europe without illusions
The constitution is dead, long live the constitution! Did
European elites simply oversell a modest document? Is there
a real crisis of legitimacy? Andrew Moravcsik explains the
meaning of "no" and others take issue with him
Europe without Illusions: A Category Error
by Andrew Moravcsik
It was not the substance of the constitution that attracted opposition but its style
and symbolism
The people of France and the Netherlands have spoken. The
constitution is dead, Turkish membership is too, and progress in areas
from services deregulation to Balkan enlargement will now be hard.
Yet for the chattering classes the result was an opportunity to repolish
long-held positions. In the face of implacable opposition to Turkish
membership, the ever liberal Economist blithely interprets the
referendums as evidence that Europe has gone too far, too fast—
except, of course, on enlargement. Timothy Garton Ash, perennial
optimist about the reconciliation of Britain's transatlantic and European
vocations, spies another promising moment for Blairite diplomacy. The
court philosopher of continental social democracy, Jürgen Habermas,
calls on European leaders (read: his former student Joschka Fischer)
to recapture the "idealism of 1968" by leading a leftist movement
against neoliberal US hegemony. With quintessentially French
misanthropy, Serge July of Libération accuses French politicians of
opportunism and French voters of racism. Across the Atlantic, neocon
kingpin Bill Kristol, undeterred by the massive protest vote against
economic reform, calls for rejection of the welfare state, open borders
to immigration and an embrace of America.
It is time to view Europe as it really is. Far from demonstrating that
the EU is in decline or disarray, the crisis demonstrates its essential
stability and legitimacy. The central error of the European
constitutional framers was one of style and symbolism rather than
substance. The constitution contained a set of modest reforms, very
much in line with European popular preferences. Yet European leaders
upset the emerging pragmatic settlement by dressing up the reforms
as a grand scheme for constitutional revision and popular
democratisation of the EU.
Looking back in 50 years, historians will not see the referendums as
the end of the EU—not even as the beginning of the end. The union
remains the most successful experiment in political institution-building
since the second world war. Historians will see instead the last gasp of
idealistic European federalism born in the mid-1940s, symbolised by
the phrase "ever closer union," and aimed at establishing a United
States of Europe. It is time to recognise that the EU can neither aspire
to replace nation states nor seek democratic legitimacy in the same
way nations do. The current EU constitutional settlement, which has
defined a stable balance between Brussels and national capitals and
democratic legitimacy through indirect accountability and extensive
checks and balances, is here to stay. To see why this is so, we must
understand the nature of the current constitutional compromise, the
reasons why European leaders called it into question, and the deeper
lessons this teaches us about the limits of European integration.
Voting patterns in the recent referendums were a reflection of three
related motivations that have dominated every EU election in history.
First is ideological extremism. The centre supported Europe, while the
extreme right and left, which now account for almost one third of the
French and Dutch electorates, voted "no." Second is protest voting
against unpopular governments. Third, and most important, is a
reaction against the insecurity felt by poorer Europeans. Whereas
business, the educated elite and wealthier Europeans favoured the
constitution, those fearful of unemployment, labour market reform,
globalisation, privatisation and the consolidation of the welfare state
opposed it. Today these concerns dovetail with the perceived economic
and cultural threat posed by Muslim immigration.
This type of disaffection is the primary political problem for European
governments today, since it is directed both against poor economic
performance and against reform measures designed to improve it. As
Fareed Zakaria observes, the tragedy is that "Europe needs more of
what's producing populist paranoia: economic reform to survive in an
era of economic competition, young immigrants to sustain its social
market, and a more strategic relationship with the Muslim world, which
would be dramatically enhanced by Turkish membership in the EU."
Forgotten in the electoral chaos was the document itself. The
constitution is, after all, a conservative text containing incremental
improvements which consolidate EU developments of the past 20
years. The "no" campaigns conceded the desirability of the modest
reforms from the start—including the foreign minister, stronger anticrime policy and streamlining of voting procedures. Such changes are
popular, not least in France, which proposed most of them. One is
forced to conclude that this document became controversial not
because its content was objectionable, but because its content was so
innocuous that citizens saw a chance to cast an inexpensive protest
vote.
What were they protesting against? Here, too, the referendums cannot
be viewed as plebiscites directed at the EU's policies. Though the EU is
associated, via its advisory "Lisbon process," with labour market and
welfare reform, these matters remain firmly within the competence of
the member states. The EU's activities as a whole, while they include
oversight of state subsidies and trade policy, may just as reasonably
be seen as part of a European effort to manage globalisation rather
than promote it. Opponents made occasional mention of EU policies
not contained in the constitution, such as the recent enlargement to
25, the introduction of the euro, the deregulation of electricity and
Turkish accession. Yet only the last of these seems to have swayed
many voters, and they seem to have been unaware that free migration
has been ruled even before negotiations begin.
So what lesson should the EU take away? The relative lack of direct
criticism of the constitution, the lack of fundamental objections to EU
policies and, above all, the stunning lack of positive proposals for
reform are striking evidence of the underlying stability of the EU
system. The 15 years since the fall of the Berlin wall has been, after
all, the most successful period in EU history. The single market, the
euro and a nascent European foreign and defence policy came into
being. EU enlargement was carried out with surprisingly little
disruption in existing member states, and proved the most costeffective western instrument for advancing global democracy and
security. In sum, the EU appears to have quietly reached a stable
constitutional settlement.
What is that settlement? The EU is now pre-eminent in trade,
agriculture, fishing, eurozone monetary policy and some business
regulation, and helps to co-ordinate co-operation in foreign policy.
Contrary to statistics one often reads, this amounts to only about 20
per cent of European regulation and legislation. Most areas of greatest
public concern—taxes, health, pensions, education, crime,
infrastructure, defence and immigration—remain firmly national. With
a tax base a fiftieth the size of the member states, an administration
smaller than that of a small city, no police force or army and a narrow
legal mandate, the EU will never encompass these fiscally and
administratively demanding tasks.
There is no new grand projet, akin to the single market of the 1980s
or the single currency of the 1990s, to justify change. In 18 months of
deliberation, the constitutional convention devoted only two days to
the expansion of EU competences. European health, pension, fiscal
and education policies have little support, while a US-style military
build-up exceeds Europe's means and insults its "civilian power" ideals.
Consider European social policy, of which we heard so much in
referendum campaigns. What concrete EU policies should this imply?
Blocking sensible efforts to reform the welfare state for long-term
sustainability is short-sighted. While many studies show that a division
of labour between the new and old members of the EU will generate
growth. There is little evidence of a regulatory or fiscal "race to the
bottom" driven by the EU, and there remains plenty of room for social
policy at national level. The neoliberal "Anglo-Saxon" threat is a myth.
Britain is building up its welfare state faster than any of its partners,
based partly on a Scandinavian model that tops international
competitiveness rankings. Indeed, with continental liberalisation and
British social democratisation, Europe's social systems are
converging—through the pressure of national politics, not as the result
of some EU social policy pipe dream.
A similar constitutional compromise has emerged with regard to
institutions. Though Anglo-American Eurosceptics have sought to
resurrect the bogeyman of a Brussels superstate headed by the
European commission, treaty changes since 1970 have consistently
moved Europe in the opposite direction. They have increased the
power of the council of ministers (favoured by France and Britain,
particularly for matters outside the economic core) and the directly
elected European parliament (favoured by Germany) at the expense of
the technocratic commission.
The proposed constitution sought to marginally improve the EU's
efficiency and transparency, while retaining its basic structure. All of
this is the sensible stuff policy wonks love and publics generally
support: European parliamentary co-decision was expanded, national
parliaments gained an advisory and gatekeeping role, the rotating
presidency was abolished, voting weights were adjusted to represent
large countries more fairly, foreign policy co-ordination was centralised
in a foreign minister and so on. The result was a multinational
constitutional compromise that attended to the interests of large and
small countries, left and right parties and Europhile and Eurosceptic
tendencies. The reforms enjoyed broad support among member
states, and none met a serious challenge in the referendum debates.
The biggest change—creation of a European foreign minister
empowered to recommend, though not impose, a more co-ordinated
foreign policy—enjoys 70 per cent approval across Europe. And
recognising the EU as it is, the constitution struck the classic idealist
phrase "ever closer union" from the treaty of Rome, and substituted
the more balanced "unity in diversity."
So it was not the substance of the emerging constitutional settlement
that triggered opposition. The objectionable aspect was its form: an
idealistic constitution. Since the 1970s, lawyers have regarded the
treaty of Rome as a de facto constitution. The new document was an
unnecessary public relations exercise based on the seemingly intuitive,
but in fact peculiar, notion that democratisation and the European
ideal could legitimate the EU. In the wake of the Nice and Amsterdam
treaties, Euro-enthusiast scholars, politicians and commentators
argued that the EU is unpopular primarily because it is secretive,
complex, unaccountable and distant from the public—in sum, because
it suffers from a "democratic deficit." Joschka Fischer, the German
foreign minister, gave the idea of constitutional legitimation a big push
with his celebrated lecture on the end point of integration at Humboldt
University in 2000. But like the other European leaders who jumped on
his bandwagon, Fischer, while ostensibly transcending a narrow,
national discourse, was in fact framing the argument in a familiar
domestic manner: in his case 1968er German anti-nationalism.
The idea was to legitimate the EU not through trade, economic growth
and useful regulation, as had been the case for 50 years, but by
politicising and democratising it. This was to be done via a
constitutional convention. Enthused by the prospect of a re-enactment
of Philadelphia 1787, millions of web-savvy Europeans were supposed
to deliberate the meaning of Europe. More pragmatic voices simply
hoped to combat cynicism by simplifying the treaty and delineating EU
prerogatives. To justify the need for change, reformers also seized on
the perception that the EU would need a radical overhaul to avoid
gridlock with 25 rather than 15 members—a fear that now seems
unjustified, both because the new states are proving constructive and
because the EU is not moving as far or fast as it once did.
Of course, the constitutional deliberation did not mobilise Europeans.
Few citizens were aware of the 200 conventionnels' deliberations.
When testimony from civil society was requested, professors turned
up. When a youth conference was called, would-be Eurocrats attended.
When those who did attend came to consider democracy, they found
that the arrangement Europe currently has is appropriate to a diverse
polity in which member states insist on checks and balances at every
level. There was little popular or elite support for democratic reform
beyond the modest increases in scrutiny by national and European
parliaments the constitution contains.
This is as it should be, for there is no "democratic deficit" in the EU—or
not much of one. Once we set aside ideal notions of democracy and
look to real-world standards, we see that the EU is as transparent,
responsive, accountable and honest as its member states. The relative
lack of centralised financial or administrative discretion all but
eliminates corruption. The EU's areas of autonomous authority—trade
policy, constitutional adjudication and central banking—are the same
as those in most democracies, where these functions are politically
insulated for sound reasons. The notion of imposing democratic control
through multiple checks and balances, rather than through elections to
a single sovereign parliament, is more American than European—but it
is no less legitimate for that. Everyone gets a say in a system in which
a European directive needs approval from a technocratic commission,
a supermajority of democratic national governments and a directly
elected parliament, and must then be implemented by national
regulators. Studies show that EU legislation is both consensual and
relatively responsive to shifts in partisan and popular opinion.
Enthusiasts for democracy fail to grasp its limits. Engaging European
citizens will not necessarily create rational (let alone supportive)
debate, because those with intense preferences about the EU tend to
be its opponents. Average citizens and political parties keep only a few
issues—usually those involving heavy tax and spending—in their mind
at any one time, and thus respond only to highly salient ideals and
issues. The pull of Europe remains weak, while the bread and butter
policies citizens care about most, including the welfare and identity
issues that dominated referendum debates, remain almost exclusively
in national hands. The failure of European elections to generate high
turnouts or focus on EU issues over the years suggests that citizens
fail to participate in EU politics not because they are blocked from
doing so, but because they have insufficient incentive.
Some democratic enthusiasts propose jump-starting EU democracy by
incorporating hot-button issues like social policy and immigration,
despite the lack of popular support for doing so. This is, in essence,
Habermas's vision. Yet anyone except a philosopher can see that this
is the sort of extreme cure that will kill the patient. There is little that
could lead the European public to decisively reject an institution as
deeply embedded as the EU, but transferring controversial issues like
social policy to it without justification might just do it.
More sober voices propose to empower national parliaments, which the
constitution sought to do in a modest way. Yet this reveals a final
fallacy of the democratisers. For there is little reason to believe that
turning policy over to a legislature makes it more legitimate. In
western democracies, popularity is inversely correlated with direct
electoral accountability. The most popular institutions are courts,
police forces and the military. Parliaments are generally disliked.
Whatever the source of Europe's declining popularity—a general
decline in political trust, unfamiliarity with institutions, xenophobia,
discontent with economic performance—it has little to do with its
democratic mandate.
Forcing an unstructured debate about an institution that handles
matters like telecommunications standardisation, the composition of
the Bosnia stabilisation force and the privatisation of electricity
production inexorably drove debate to the lowest common
denominator. When pro-European political elites found themselves
defending a constitution with modest content, they felt they had no
alternative but to oversell it using inflated notions of what the EU does
and rhetoric drawn from 1950s European idealism. Small wonder they
were outgunned by grumpy populists with stronger symbols rooted in
class, nation and race (and even more inflated views of what the EU
does). Publics became confused and alarmed by the scare tactics of
both sides. The referendums came to inhabit a strange twilight zone of
symbolic politics, in which claims about the EU bore little relationship
to reality, and support and opposition for a status quo constitution
became a potent symbol for the myriad hopes and fears of modern
electorates.
In the wake of this debacle, European politicians must find a
constructive path forward. They should start with a collective mea
culpa. The document itself must be renounced. Then over the next few
years, the EU should return to its successful tradition of quiet and
pragmatic reform. Europeans consistently support incremental
advances in the union's foreign, internal security and economic policies
along the lines set forth in the constitution. Turkish membership is off
the agenda, as it probably would have been even without the
referendums. Politicians need to concede this, and concede it loud and
clear, in order to preserve continued EU enlargement in the Balkans.
Yet a halfway arrangement acceptable to both EU and Turkish publics
remains a realistic goal over the next 20 years and may be better for
Turkey than the limited type of EU membership that is currently on
offer. No other European policy could contribute as much to global
peace and security.
Above all, European politicians need to acknowledge explicitly the
existence of a stable European constitutional settlement. The unique
genius of the EU is that it locks in policy co-ordination while respecting
the powerful rhetoric and symbols that still attach to national identity.
Publics will be reassured if it is portrayed as stable and successful.
There is no shameful compromise with grand principles here. On the
contrary, a constitutional order that preserves national democratic
politics for the issues most salient to citizens, but delegates to more
indirect democratic forms those issues that are of less concern, or on
which there is an administrative, technical or legal consensus, is highly
appealing. The EU's distinctive system of multi-level governance is the
only new form of state organisation to emerge and prosper since the
rise of the welfare state at the turn of the 20th century. Now it is a
mature constitutional order, one that no longer needs to move forward
to legitimate its past and present successes. Left behind must be the
European centralisers and democratisers for whom "ever closer union"
remains an end in itself. They will insist that the answer to failed
democracy is more democracy and the answer to a failed constitution
is another constitution. But Europe has moved beyond them.
Disowning this well-meaning, even admirable, band of idealists may
seem harsh, but it is both necessary and just. On this basis, Europeans
can develop a new discourse of national interest, pragmatic cooperation and constitutional stability—a discourse that sees Europe as
it is. The constitution is dead, long live the constitution!
Andrew Moravcsik directs the EU programme at Princeton
University. He is the editor of "Europe without illusions"
(University Press of America)
A crisis of legitimacy
by Larry Siedentop
Andrew Moravcsik is too complacent. There is a crisis, not on the streets but in
our minds
What would have to happen in Europe for Andrew Moravcsik to
change his view of the current condition of the EU as the best of all possible
worlds? Moravcsik has been a persistent critic of those, like myself, who have
expressed fears about the European enterprise running too far ahead of public
opinion—and hence of no longer being rooted in popular consent. In his view,
those who have appealed to the idea of democracy—emphasising the need for
decentralisation, empowerment and citizenship simply fail to understand the
nature of the European enterprise. For the EU is not a state. Nor is it likely to
become one.
In defending the pragmatic, incremental character of the EU—and the
achievements such co-operation has led to—Moravcsik's argument is persuasive,
if applied to the first three decades following the treaty of Rome. But since the
acceleration of integration in the late 1980s, at the time of German unification,
his argument runs into trouble. It fails to take account of the cumulative effect of
a series of discrete changes—each of which, by itself, seems to belong to the
incremental tradition of the EU—in altering perceptions. The growing impact of
economic and social regulations from Brussels, the creation of the euro and the
enlargement of the EU have combined to create the impression that power is
escaping from national electorates. The EU ceased to be about limited
institutional changes and began to threaten national identities.
Self-government is a central part of those national identities. So the irony of the
referendum results in France and the Netherlands is that the referendum—
potentially a dangerous instrument of direct democracy—has been used to
defend representative government. The referendum became a means of
reasserting control over political classes that had acquiesced in excessive
transfers of authority.
On the continent, the usual pattern of politics has been for parties of the centreright and the centre-left to band together over EU issues—removing them from
the agenda of political controversy. Is it surprising that this strategy has created
the impression among electorates that European issues are too important for
them to be consulted? A powerful reaction can now be detected not merely in
France and the Netherlands. Polls suggest that Germans would have voted "no"
too. When those promoting the EU ignore hostile opinion, they play a dangerous
game.
The changes required of the peoples of Europe since 1989, beginning with the
loss of national currencies, have left them anxious. They have called into
question not just geographical borders, but borders in the mind. Such borders
are indispensable if representative government is to flourish, and with it a
culture of consent. Otherwise, who represents what?
In Britain, the fact that one of the two major parties has been fairly consistently
Eurosceptic means that opinion has not been repressed—earning the country the
reputation of being a bad European. Perhaps it also means that the reputation of
the political class as a whole is less at risk than on the continent. Those who
have observed events in the Netherlands since the Pim Fortuyn episode are
struck by the bewilderment of the political class—by a widespread sense that it is
walking on thin ice.
Too much of Moravcsik's argument rests on the EU not being a state. But some
of the attributes of a state may be acquired, without all being present. That is
the condition of the EU today. A directly elected parliament, the formal
supremacy of EU law and a supreme court, a single currency (for some
members)—all of these have pushed the EU beyond the confines of a
confederation, while still falling short of a full-blown federation. When proposals
for a single foreign and security policy, as well as the creation of a diplomatic
corps and a military force, are added, it is hardly surprising that Europeans have
begun to wonder where they stand.
Moravcsik seems to rule out a priori the possibility that, as an unintended
consequence of the acceleration of integration, Europe may be in crisis. Of
course, there are few external signs of such a crisis. There are no riots, no
extremists in power, no abrogation of civil liberties, no postponement of
elections. Still, I think there is a crisis in Europe. It is a crisis in minds rather
than on the streets—and disorder in the mind, in our ideas and loyalties, can be
even more dangerous than its more visible counterparts. Europe is suffering a
crisis of legitimacy. Though the phrase is used interchangeably with a
"democratic deficit," they are not the same thing. A crisis of legitimacy occurs
when there is no widely understood and accepted framework for public decisionmaking. This is the plight of Europe today.
Larry Siedentop is emeritus fellow, Keble College, Oxford and author of
"Democracy in Europe" (Allen Lane)
Let Turkey in
by Gisela Stuart
We must keep the door open to full Turkish membership and make subsidiarity a
reality
Full Turkish membership is now impossible, says Andrew
Moravcsik. I am not so sure. But I do agree that a shorthand way of determining
someone's view of Europe's future is to ask: "Should Turkey join?" Those who
still see the European project as one that has at its core the bringing together of
France and Germany and the entrenching of the postwar social model see
Turkey's accession as a threat. Others just want to retreat to the nation state.
But neither stance will protect us from the threats of the modern world—
terrorists, globalised economies and waves of unmanaged migration across the
globe.
We who still support Turkish entry recognise that one of the most significant
achievements of the EU has been its aid to civic nation-building. The prospect of
EU membership helped Spain and Greece to shed their fascist pasts, and helped
the former communist countries to build pluralist market democracies. It will
take longer in the Balkans, but ultimately there too we will see democratic
market economies emerging. It is in part thanks to the EU that they have not
become failed states. It would be a serious failure of our responsibilities if the
current crisis put a stop to the Balkan countries' membership hopes.
Turkey's membership would not come without problems. It has to improve its
human rights record. But it is a secular Islamic democracy. In ten years it will
have a larger population than Germany. It has military importance as a Nato
member. Its membership will change the nature of the old EU—and why not?
One benefit of the rejection of the constitution is that a more rigorous application
of the idea of subsidiarity may now be possible. Is this a pan-European problem
to which there is a pan-European solution? If yes, then member states must
accept their responsibilities, comply with the rules and find the finance. If not,
then member states should deal with it. Areas such as agricultural policy,
regional aid and most legislation with a social dimension should stay at or be
returned to national level, within some broad EU-wide agreement on ground
rules.
This does not mean that the EU will become just a trading bloc: many areas of
non-economic co-operation are already well entrenched and should remain so.
But this approach does recognise the diversity of national traditions in areas like
social and welfare policy. The Labour government would find few followers in
other EU countries for its way of dealing with poverty and inequality—welfare to
work programmes, underpinned by a minimum wage, working tax credits and a
big boost for childcare—but this package is right for British conditions.
Gisela Stuart is Labour MP for Birmingham Edgbaston
Market states
by John Kay
Once national boundaries cease to matter economically "Europe" loses its point
too
Andrew Moravcsik is right to stress that the EU is a new kind of political entity.
Nations of the 19th and 20th centuries were framed round Weber's concept of
the state as the body enjoying a territorial monopoly of coercion. But European
states are no longer defined by their coercive powers. Internally, the
requirement to enforce an unpopular social order has been replaced by
legitimate regulation based on consent. Externally, the notion that nations could
achieve prosperity for their citizens through conquest proved a failure. It is
inconceivable that economic competition between EU states could spill over into
armed conflict; this is the universally recognised central achievement of the EU.
So government is not, or is not much, any more about coercion. There is a real
difference here between Europe and the US: America has 2.1m people in prison,
many law-abiding citizens who describe their experience of state coercion in
language simply bewildering to most Europeans, and a taste for military
adventure to which countries on this side of the Atlantic have been intransigently
resistant. But if coercive force is no longer a primary function of European
government, what has taken its place?
Modern European government is principally a provider of goods and services.
The most important of these services are economic and physical security, plus
health, education and the infrastructure of everyday life. This makes government
an economic agent little different from other economic agents, and modern
government is judged by similar criteria. Governments of France and Germany
have failed to deliver economic security to a significant minority of customercitizens, and in responding to criticism have seemed to threaten the security of
those who have such security. Similarly, governments in Britain and Spain failed
to persuade their customer-citizens that alliance with the US over Iraq enhanced
their physical security. The negative responses of voters were mostly expressed
not in the language of political ideologies, but with the grumpy dissatisfaction
that is applied to unsatisfactory products or unhelpful call centres.
If government is not (much) about coercion, then the other components of
Weber's definition—monopoly and territoriality—also lose their relevance. The
central institutions of the EU have a once-and-for-all task to perform in tearing
down the barriers which extended the territorial monopoly of coercion into
territorial monopolies of many other things—steel and electricity, health and
education.
But once these barriers disappear, competition between jurisdictions as well as
between enterprises drives functions to appropriate levels. The market is a force
for subsidiarity. Military activity is the government function most subject to scale
economies, and if military activity diminishes, the optimal size of jurisdiction
falls. The paradox of European integration is that once national boundaries lose
economic significance, you discover that most services are better delivered by
smaller, not larger units. It is already apparent that the smaller states of Europe
are more successful in meeting customer needs, and in maintaining the social
solidarity which is the basis of welfare provision. The European level is the right
jurisdiction for global warming and common fisheries policies, but not for
agricultural support, and probably not yet for interest rate policy, and it will
never be the right level for drinking-water quality or primary education. When
Nicolas Sarkozy told a young audience that Europe was about competition in
mobile telephony, he was telling the banal truth. And, perhaps unintentionally,
explaining why they were right not to take European or any politics too seriously.
This is why Europe has no pressing need to define the relative responsibilities of
its different public authorities. The union will evolve without a formal
constitution. Perhaps ratification's failure will allow a debate about the nature of
the postmodern state, more genuinely analogous to Philadelphia in 1787.
"Europhile but Bureausceptic, internationalist but culturally protectionist, liberalleft, green" is how Julian Barnes describes his Anglo-French position, adding "not
many votes there." On the evidence of the last month, there may be quite a lot
of votes there.
John Kay is author of "The Truth About Markets"
A crisis for the left
by Sunder Katwala
The "no" vote underlines the weakness of the European centre-left outside
Britain
That it was voters of the left who sank the constitution in France and the
Netherlands was, in part, a political accident. Even pro-constitution politicians
found it difficult to campaign hard for referendums called by unpopular
governments of the right. But Andrew Moravcsik passes over the deep gloom for
Europe's left that is underlined by the "no" vote, a gloom that is likely to deepen
in a series of elections over the next two years.
Gerhard Schröder's gamble on an early German poll in September looks certain
to end in defeat. It is Nicolas Sarzoky, not the socialist opposition, who looks set
to profit from Jacques Chirac's troubles, while Romano Prodi is struggling to hold
Italy's left together, despite Silvio Berlusconi's unpopularity, ahead of elections
next summer. Even Sweden's Social Democrats face a battle to retain office next
year.
New Labour's re-election for a third term, far from making it a model for others,
seems only to confirm that it is outside Europe's centre-left mainstream. It has
avoided economic discontent, it is said, by capitulating to globalisation. It has
sheltered itself from populist anti-politics over diversity and immigration—by
conceding ground to the political right. It has preferred to build alliances for
reform in Europe with governments of the centre-right and for reform
internationally with George W Bush.
Much of this ignores the British government record. It is only in Britain in the last
five years that politics has seen a decisive shift to the left, at least in
socioeconomic matters. Job creation and growth has been combined with
redistribution via tax credits and a rising minimum wage. Health spending has
doubled, with further ambitions to introduce comprehensive childcare and to end
child poverty. Europe's left has lost ground almost everywhere (except Spain)
but in Britain, admittedly from a more right-wing starting point than most
countries, Labour is building what Nick Pearce of the IPPR labels an "Anglo-social
model." The European influences are clearly acknowledged in terms of policy
(Sweden and Denmark in particular) and benchmarks (matching the EU average
on health spending). This experience should be at the centre of the quest for a
European social model combining growth and social justice.
So why isn't it? The legacy of British semi-detachment plays a part, plus the
feeling that Britain's starting point is just too different from much of continental
Europe. But ideology plays a role too, especially on the anti-reform left in France
and Germany. If you believe it to be axiomatic that labour market flexibility and
social justice cannot coexist, then the British model is not worth looking at.
The harsh truth is that there are few credible interlocutors for Britain on the
European left. Indeed, there are many parallels in Germany and France with
Labour's own wilderness years. Like Healey and Callaghan, Hans Eichel and
Gerhard Schröder make the case for economic reform but cannot deliver it.
Oskar Lafontaine's breakaway group equates to the Bennite rather than the
Jenkinsite wing leaving Labour in the 1980s. And the French socialists are
following this template for political disaster even more closely—with leading
figures campaigning on opposite sides over the constitution, followed by the
ejection of Laurent Fabius from the leadership.
The depressing but understandable truth is that Labour leaders hope that it will
be the new faces of the centre-right in Europe, Angela Merkel and Nicolas
Sarzoky, who will sit alongside Gordon Brown in 2007-08 trying to get Europe
moving again.
Sunder Katwala is general secretary of the Fabian Society
Variable geometry
by Charles Grant
The end of enlargement would be a tragedy. Perhaps it can be saved by
"variable geometry"
The French and Dutch referendums have halted both deepening and widening in
the EU. The two ideas have always been intimately linked. The political elites in
core countries such as France were reluctant to accept a wider Europe, fearing
that the result would be a free trade area with weak political institutions. But in
the end they accepted enlargement, because a succession of treaties—1985,
1991, 1997, 2000 and 2004—held out the promise of a stronger political union.
Now that deepening has stopped, the governments of several EU countries are
likely to veto further enlargement. Even before the recent referendums, France
had changed its constitution so that the conclusion of accession talks with any
potential member must be approved by a referendum (this will not apply to
Romania and Bulgaria). Austria too has promised a referendum on Turkish
membership.
Bulgaria and Romania will probably join as planned, in 2007 or 2008, though
their accession treaty still needs to be ratified by 25 parliaments. Turkey is likely
to start talks on schedule in October, even if Angela Merkel, who opposes
Turkish membership, becomes German chancellor in September. However, these
talks will move at the pace of the most reluctant EU member, and they are
unlikely to make much progress for many years, if ever. That in turn will
strengthen the elements in Turkey's army and Islamic movement which fear
European integration, and oppose the reforms requested by the EU.
The EU's new aversion to enlargement may have a disastrous impact on the
Balkans. Croatia must be ruing its failure to co-operate fully with the Hague war
crimes tribunal, as a result of which the EU postponed the accession talks that
had been due to start in March 2005. In few member states is public opinion
happy about Bosnia, Serbia, Albania or Macedonia joining. But if Brussels
withdraws the carrot of eventual membership from such countries, it loses the
ability to cajole them into making hard reforms. The best hope for Kosovo's
future is some sort of conditional independence, but Serbia is unlikely to accept
that without the prospect of EU membership for itself. To the EU's east, countries
such as Ukraine, Moldova, Belarus and Georgia now have little chance of
membership.
Andrew Moravcsik acknowledges that enlargement represents one of the
triumphs of the EU, but seems rather sanguine about its demise. He shouldn't
be: it is a potential tragedy. Of course, there has to be a limit at some point—
north African countries are not in Europe and so cannot join. And enlargement
should not be an elite project imposed on electorates.
But despite the difficulties, Europe's leaders should try to keep alive the
membership hopes of the Balkan states, Turkey, Ukraine and Moldava. If the
union says "never," it will weaken the reformist forces within these countries and
risk suffering the effects of more political instability, economic crises and flows of
emigrants. Unless the EU takes responsibility for places such as Kosovo and
Transdniestria, they will remain at the centre of networks that traffic weapons,
young women and drugs across Europe.
The EU should extend over the whole continent not only for the beneficial impact
on the countries that join, but also for the economic, demographic and
geopolitical gains for the union as a whole. Enlargement offers more
opportunities for trade and investment, and the prospect of more young people
in the union, to balance its ageing population. A broader union will be better able
to influence the troubled regions that lie around Europe's perimeter—north
Africa, the middle east, the Caucasus and Russia. Moreover, taking in Muslim
countries such as Bosnia, Albania and Turkey will help to soften the divide
between the west and Islam.
Given popular hostility towards further enlargement, how can the prospect of a
wider union be sustained? The most obvious requirement is for politicians in the
member states to lead, and explain the benefits. They might become more
willing to do so if the union embraced more "variable geometry": the idea that
not every country need take part in every policy but some can cooperate more
closely. Already some countries stay out of the euro and the Schengen passport
union. Those countries which want more political union can use the provisions in
the current treaties, never yet applied, to integrate more. Future member states
might also be persuaded to stay out of some policies—Turkey with farm policy,
for example, or Serbia with the Schengen area. More variable geometry could
thus make enlargement less threatening to the EU's political leaders and
electorates.
Charles Grant is director of the Centre for European Reform
French myth-making
by Philippe Legrain
France's problems are of France's making - not the "ultra-liberal" Anglo-Saxon
bogeyman
Many French people rejected the constitution because they regard Brussels as
the handmaiden of “ultra-liberal” Anglo-Saxon capitalism, intent on deregulating
markets and opening up the French economy to competition. Just look, they say,
at the EU’s proposed services directive, which would tear down barriers to trade
in services, or at the eastward enlargement of the EU, which has exposed French
workers to competition from low-wage, low-tax economies such as Poland. The
upshot, they claim, is that the EU is driving social standards down and pushing
unemployment up.
This is mostly nonsense. Start with the blindingly obvious: an organisation
whose biggest budget item is the common agricultural policy, which shovels vast
subsidies to European farmers (many of them French) and imposes taxes on
foreign food, is not “ultra-liberal” by any stretch of the imagination. Europe is not
even a free trade zone. Although most barriers to trade in manufactured goods
have been abolished, vast swathes of the European economy remain segmented
along national lines. Europe’s single market does not encompass its many
service sectors—such as finance, media, law, construction, health, education and
energy—which account for 70 per cent of the European economy and a similar
proportion of its jobs. Far from being ultra-liberal, the EU is only semi-liberal.
But the French were right that Europe was edging in a liberal direction. The
admission last year of ten new member states, most of which are less
interventionist than France, has boosted competition somewhat, although since
they account for less than 5 per cent of the total EU economy their impact on
France has not been huge. And had Jacques Chirac not blocked it back in March,
the EU’s services directive would have exposed the French economy to more
competition. Workers in uncompetitive sectors would have suffered, but
consumers, exporters and the economy as a whole would have gained.
Yet even the completion of a true single European market stretching from Lisbon
to Latvia would not imply a “race to the bottom” in taxes and standards. It is
simply not true that factories and jobs are inevitably lured to countries with the
lowest taxes and regulations, pressing down on standards in France. For a start,
many services—such as haircuts, childcare and nursing—can only be provided
locally. Moreover, taxes and regulations are only one factor among many that
determine where people work and companies establish themselves. Although
France’s high taxes and regulations may deter some, its well-educated
workforce, excellent infrastructure, geographical position, quality of life and
membership of the euro will attract others.
International competition does not necessarily drive taxes and standards down.
France’s tax revenue accounts for around 45 per cent of its economy—just as it
did ten years ago. Indeed, in some European countries, taxes are rising. Over
the past three years in supposedly ultra-liberal Britain the government’s tax take
as a share of the economy has risen by two percentage points—and is set to rise
by a further point over the next two years.
Nor can Europe, still less EU enlargement, be blamed for France’s high
unemployment. France’s jobless rate has been high for over 20 years, long
before even the creation of the single market in 1993, much less last year’s EU
enlargement. Moreover, within that European single market, jobless rates vary
from 4.6 per cent in Austria to 12.3 per cent in Belgium, so there is nothing
inherent in the single market that prevents France from creating jobs.
The truth is that the main fault for France’s enduring high unemployment lies at
home: its outdated product and labour market regulations discourage companies
from hiring workers and make it costly for them to adjust to changing tastes and
technologies. Does this mean that France has to deregulate its economy, and
embrace ultra-liberal Anglo-Saxon ways, in order to get unemployment down?
No. Far from blaming Europe for its travails, France ought to be looking to
successful European social democracies, such as Denmark and Sweden, to solve
its problems. The Nordic countries have thriving economies that combine high
standards for working conditions with low unemployment. Without too much pain
France could enjoy similar success.
Phillipe Legrain is author of Open World: The Truth about Globalisation
(Abacus)
Hints for the elite
by Michael Maclay
A ten-point plan for Europe after the referendums
1. Stop talking about the constitution
As Attlee once said to an irritating party colleague, a period of silence on your
part would be much appreciated. The people have spoken, however confused or
contradictory their message. They were asked a question, and they said no.
Don’t pretend otherwise, and don’t think you can ask that question again. Call it
a period of reflection, a decent interval or whatever. For now, silence is golden.
2. Accept the referendum results as a victory for decent scepticism
Scepticism in the best sense. Not saying no to everything. People were simply
not convinced by the proposal that was put to them. They had their reasons,
some intelligible, some less so. Don’t read too much into their verdict, nor too
little. It is not a failure of democracy when people say no.
3. Don’t disown your efforts
The whole process, from the convention on, was an honourable and intelligent
attempt to give the EU greater legitimacy, and specifically to make an enlarged
EU work. It aimed precisely to give a broader base to what everyone knew had
been and still is too much of an elite project. Those aims of increasing legitimacy
and making sense of enlargement will still have to be realised, and the point now
is to learn from the latest experience.
4. Accept that nation states are what makes Europe democratic, not
the EU
There is not a European demos, a European “We, the people” and there will not
be one any time soon. We have learnt that calling a treaty a constitution was a
bad idea, even if many of the proposals in it were good. From now on, justify the
EU in terms of the advantages it offers to member states and their populations,
and explain it in terms of now - not why it made sense to launch integration two
generations ago. Arguments based on national interest are not selfish, nor do
they lack idealism.
5. Submit to the doctrine of ripe time
Enlargement creates anxieties as well as opportunities. It will take time to
assimilate the most recent wave of new members while keeping alive the idea
that enlargement is a defining characteristic of the EU’s mission for its continent.
That mission must not be jeopardised by being over-hasty.
6. But don’t make anyone second class and don’t lock anyone out
Don’t go for hard cores or super-leagues that will only divide and cause
bitterness among existing members. And make clear that no one who aspires to
EU membership is ever ruled out for ever. All of the criteria and processes used
to spread membership so far should be applied in Europe’s Balkan backyard, to
encourage former Yugoslav states to join as soon as they and we are ready.
Make clear that this message continues to apply further east.
7. Don’t give up on institutional change
Do make those practical changes that are possible without the need for further
intergovernmental conferences. Many things can legitimately be done towards
setting up rational presidency arrangements, encouraging accountability to
national parliaments, and making the EU’s role in the wider world more forceful
and coherent. But don’t use the language of statehood: no more foreign
"ministers" or "ministries."
8. No initiatives for their own sake
Don’t seek to compensate for failure with the constitution by seeking radical
achievement elsewhere. There is gritty and incremental work to be done on
economic reform and quality of life issues that will affect people much more
directly than another "relaunch." Allow competition and peer pressure to
encourage national governments to take the right decisions.
9. No taboos (almost)
Allow people to question sacred cows like the Cap, the British rebate and the
euro. Europe’s economy might even benefit from a period of euro weakness,
which in turn might remind some countries why they wanted the euro in the first
place. It is much more likely than not to survive, but don’t try to prevent people
even asking if it is really good for them. And don’t question the single market or
the arrangements for external trade, which provide discipline, a common
interest, and a platform for prosperity - without them the EU would not be worth
preserving.
10. Relax
The EU has created a civilised, humane, often exemplary way of mixing national
interests and traditions, in which we can take deep pride. Its model of multiple
identities within a socially responsible, free-trading framework provides
inspiration far beyond Europe. Its major weakness is economic stagnation, best
tackled by tough reformist policies agreed at national level. The layer of identity
represented by the EU is but one layer, ultimately benevolent and unthreatening.
We can afford to loosen up.
Michael Maclay is author of the Pocket History of the European Union
(Sutton)